James Incorporated is authorized to issue 5,000,000 shares of $1 par value common stock. In its second year of business, the company has the following transactions. Treasury Stock Building Common Stock Additional Paid-in Capital from Common Stock Cash Land Retained Earnings Common Stock Dividend Distributable Cash Dividends Payable Preferred Stock Equipment Additional Paid-in Capital from Preferred Stock Using the accounts listed above, journalize the transactions and calculate how many shares of stock are outstanding at August 3. PLEASE NOTE: For accounts having similar accounting treatment (DR or CR), you are to record accounts in the same order as shown in the textbook. You must enter the account names exactly as written above and all whole dollar amounts will be with "$" and commas as needed (i.e. $12,345). Mar. 31 - Issued 30,000 shares at $10 share: DR CR CR Jul. 9 - Issued 100,000 shares in exchange for a building with a clearly determined value of $700,000: DR CR CR Aug. 30 - Purchased 7,000 shares of treasury stock at $9 per share: DR CR How many shares of stock are outstanding at August 30? (Input number only and use comma placement as needed.)
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
1.
James Incorporated is authorized to issue 5,000,000 shares of $1 par value common stock. In its second year of business, the company has the following transactions.
|
|
Building | Common Stock |
| Additional Paid-in Capital from Common Stock | Cash | Land |
| Common Stock Dividend Distributable | Cash Dividends Payable | |
| Equipment | Additional Paid-in Capital from Preferred Stock |
Using the accounts listed above, journalize the transactions and calculate how many shares of stock are outstanding at August 3.
PLEASE NOTE: For accounts having similar accounting treatment (DR or CR), you are to record accounts in the same order as shown in the textbook. You must enter the account names exactly as written above and all whole dollar amounts will be with "$" and commas as needed (i.e. $12,345).
- Mar. 31 - Issued 30,000 shares at $10 share:
-
DR CR CR - Jul. 9 - Issued 100,000 shares in exchange for a building with a clearly determined value of $700,000:
-
DR CR CR - Aug. 30 - Purchased 7,000 shares of treasury stock at $9 per share:
-
DR CR - How many shares of stock are outstanding at August 30? (Input number only and use comma placement as needed.)
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